Question: Continental Airlines signed contracts with its major creditors (mostly banks) that require the company to maintain a minimum cash balance of $600 million, a minimum

Continental Airlines signed contracts with its major creditors (mostly banks) that require the company to maintain a minimum cash balance of $600 million, a minimum shareholders’ equity balance of $972 million, and dividend payments restricted to no more than $576 million. Discuss why the creditors impose such restrictions on Continental.

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